While I agree that the facebook fears are probably overblown, the TOS' language does not comfort me at all. In fact, I think that the Verge is entirely wrong in that article(IANAL, etc.).
This TOS tweak allows Instagram go sell your content for advertising purposes to a third party. They can use your images, as is, in their advertising(presumably on Instagram, though that is not clear). So they can take payment for your content, without compensating you at all.
That's a pretty huge difference from Facebook's TOS. In there, they state that they will use your content to deliver ads. They're not delivering your content to other parties to be used in their ad campaign.
This TOS tweak allows Instagram go sell your content for advertising purposes to a third party. They can use your images, as is, in their advertising(presumably on Instagram, though that is not clear). So they can take payment for your content, without compensating you at all.
That's a pretty huge difference from Facebook's TOS. In there, they state that they will use your content to deliver ads. They're not delivering your content to other parties to be used in their ad campaign.